This news brief contains information to help financial advisors assist individuals with employee stock options and restricted shares by facilitating timely and prudent diversification decisions.

  • ISO Planning Guidelines: If you have clients with Incentive Stock Options (ISOs) that have low Insight Ratios, be aware that it is prudent to exercise and hold them early in the year. This article explains the 5 rules-of-thumb regarding ISO/AMT planning. It also includes a summary of the Major AMT Changes Under the New Tax Law from myStockOptions.com.
  • How to Help Employees Better Value Stock Options as Compensation: This article from the Journal of Financial Planning describes academic research that financial planners can use to help both their clients who receive ESOs and the companies that issue ESOs to understand the underlying components of an option-pricing estimate.
  • Effects of the New Tax Law on Stock Compensation: This piece from myStockOptions.com lists the changes in tax rates under the new legislation that apply to income from stock option exercises, restricted stock and RSU vesting, ESPP purchases,      sales of stock, and dividends.
  • Tips on Building an Executive Services Program: Working with executives is a proven way of securing high net worth clients. However, financial advisory firms who are interested in competing in this market and achieving significant revenue goals need to provide more than just basic financial planning that includes employee stock options and restricted shares. Pursuing the equity compensation market requires planned effort and coordinated resources. This article explains the 4 things that are critical to implementing a successful executive services program.
  • Supercharging Corporate Stock Option Programs: Think there’s no point in explaining the time value of ESOs to employees? Think again! This panel discussion from the 2012 NASPP National Conference presents research showing that communicating the time value inherent in options can significantly change how employees view their stock options grants. This presentation also offers strategies for explaining time value and provides a company case study that dispels the myth that time value information is too much trouble to provide and too difficult for employees to comprehend.

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